Vaccine makers’ no profit pledge stirs doubts in Congress – POLITICO

In the years before the pandemic, pharmaceutical companies had been abandoning vaccine development. It requires hefty expenses in research, testing and manufacturing, and the market can be limited.

For, however, the vaccine market spans the globe and much of the manufacturing and development costs are government-subsidized.

Operation Warp Speed last week invested $1.6 billion in a vaccine candidate from Novavax. It said the U.S. “will own the 100 million doses of investigational vaccine” produced by the research. The Department of and Human Services also made clear that if the vaccine proves safe and effective, those 100 million doses would be provided “at no cost” to Americans.

That’s the first, and so far only, guarantee made on pricing and doses by the government — even though it’s the sixth vaccine to receive U.S. funds.

Rep. Rosa DeLauro (D-Conn.), chair of the House Appropriations health subcommittee, said she expects that “Congress will need to provide further supplemental appropriations to purchase hundreds of millions of doses of vaccine once it has been developed.” House appropriators are communicating with HHS to determine how many doses are guaranteed under current contracts with vaccine manufacturers, she added.

An HHS spokesperson offered some reassurance on eventual costs, saying “one of the considerations in the dose price is any federal funding that was provided to develop the vaccine.” And she noted, as seen with Novavax, that “when the federal government pays for all of the development and manufacturing of a product, the federal government owns the doses manufactured with tax dollars.”

But she said that the money BARDA invested earlier in jump-starting vaccine manufacturing capacity didn’t include a purchase of doses.

AstraZeneca and Johnson & Johnson, which together have received more than $1.5 billion from the U.S. government, said last month that they would develop their respective vaccine candidates on a nonprofit basis during the pandemic.

“Just like everyone else, we’ll do it at no profit,” AstraZeneca CEO Pascal Soriot said. “This is what a successful, healthy pharmaceutical industry can do.”

But the companies’ caveat that the vaccines would be offered at no profit “during the pandemic” potentially sets up a scenario where if the outbreak is declared over, the companies could charge more — even if people need boosters or annual shots to keep the virus at bay.

When contacted by POLITICO, neither company was willing to offer further details on what they mean specifically by “no profit.” That lack of detail leaves many wondering what, if anything, to expect, especially given Pfizer’s stance.

Pfizer initially said in an industry media briefing in late May that its vaccine’s price would be aligned with Johnson & Johnson and AstraZeneca. Pfizer CEO Albert Bourla said financial returns were not driving the vaccine work.

But then Bourla told a Goldman Sachs conference in June that the vaccine would be priced in line with shots on the market for other conditions. Later that month, he said at a Milken Institute event that it would be manufactured and produced on a for-profit basis.

Pfizer’s existing vaccines have brought in more than $20 billion since 2015.

The general lack of transparency about the U.S. government’s initial contracts with vaccine developers means even Congress doesn’t know if doses of those vaccines are assured. Nor do lawmakers know what the companies’ nonprofit pledges mean, one senior Hill staffer noted. That matters as the government will be a major purchaser.

Sen. Maggie Hassan (D-N.H.) emailed POLITICO that the administration has been “conspicuously silent about the actual terms of these agreements and at what price the federal government would secure doses.”

Even if vaccines are developed on a nonprofit basis, that doesn’t mean there aren’t any costs. In fact, costs could be shifted onto insurance premiums or higher deductibles, hitting consumers indirectly.

Advocates who have been pushing for lower drug prices worry that the nonprofit promises ring hollow because of the billions of taxpayer dollars that have gone into the vaccine projects and the lack of transparency on what developers are spending on their research, development and manufacturing operations.

David Mitchell, a cancer patient who founded and leads the nonprofit Patients For Affordable Drugs, called the nonprofit pledge “part of the charm offensive to rescue us from the coronavirus, but billions are going from taxpayers to these companies.” He predicted U.S. taxpayers will be forced to buy back the doses that prove effective.

Kate Elder, vaccines policy adviser at Doctors Without Borders, echoed Mitchell’s concerns, noting that what the U.S. gets on the back end from vaccines developed under these BARDA transactions may have no relation to what’s paid upfront. She also said the deals between BARDA and the vaccine developers are confidential, so “no one knows if certain vaccine prices are baked into them.”

Peter Maybarduk, director of the consumer advocacy nonprofit Public Citizen, similarly questioned the pledges: “What is a nonprofit price when the investment is covered by taxpayers and the invention is based on public funds?”

The nongovernmental organization Knowledge Ecology International obtained redacted versions of some of the BARDA vaccine contracts in early July. In a version of the J&J contract, at least, the government has limited its ability to intervene even if a vaccine developer charges an unreasonable price.

How the government could step in if a vaccine was overpriced is unclear. At a recent Senate hearing, NIH Director Francis Collins was questioned on the KEI documents, but he said the Bayh-Dole Act is not intended to address unacceptable prices. That 1980 law does include a provision that lets the government break a patent and bring cheaper alternatives to market if it has significantly invested in a drug’s development. But the provision has never been used.

Leave a Reply

Your email address will not be published. Required fields are marked *